Broker-Dealer Litigation and Arbitration
Sidley offers a national practice in the field of broker-dealer litigation and arbitration. We have represented the world’s largest brokerage firms in an array of complex disputes, including class actions and other proceedings attacking industry practices in the areas of fee-based accounts, money-market sweeps, bank deposit accounts, markups and compensation and marketing of proprietary or preferred products. Our leadership in this area is exemplified by our representation of the Securities Industry and Financial Markets Association (SIFMA) in numerous high-profile matters, including as amicus curiae in the United States Supreme Court.
Representative matters include:
- Representation of a major bank and broker-dealer in a putative class action in which plaintiffs alleged that the bank instituted a delay policy under which it did not immediately transfer proceeds from the maturity of Treasury Bills and other securities received in non-interest bearing accounts to interest bearing accounts;
- Representation of a leading broker-dealer in a suit filed by the New York Attorney General alleging violations of various state statutes and common law in connection with non-discretionary, fee-based brokerage accounts;
- Representation of a major bank in a putative class action in which plaintiffs alleged that the bank breached its fiduciary duty, engaged in deceptive practices and violated the antitrust laws by sweeping transaction proceeds into bank deposit accounts rather than higher-yielding money-market accounts;
- Representation of a major broker-dealer and its top institutional salesman against more than 200 plaintiffs alleging Section 10(b) violations arising from allegations of a pump-and-dump scheme;
- Representation of a leading broker-dealer in a putative Section 10(b) class action in which plaintiffs alleged excessive markups on municipal bonds;
- Representation of a leading broker-dealer in a Section 10(b) and Rule 12(a)(2) class action in which plaintiffs alleged that defendants failed to disclose incentives to sell proprietary and preferred mutual funds; and
- Representation of a major broker-dealer in two “private attorney general” actions brought under California’s Business and Practices Code Section 17200 relating to municipal bond sales practices.
In addition, lawyers in our Chicago, Los Angeles, New York, San Francisco and Washington, D.C. offices have substantial experience representing brokerage firms and their management and employees in a wide range of disputes relating to and arising from securities, commodities, futures and foreign exchange trading. We routinely defend our clients against claims asserted by institutional and retail customers, such as those alleging fraud, unauthorized exercise of discretion, churning, unsuitability, failure to supervise, improper margin calls, unfair securities liquidations and failure to hedge a concentrated position. We have represented our clients in these disputes in state and federal courts around the country, as well as arbitration fora sponsored by self-regulatory organizations and exchanges, including the National Association of Securities Dealers, the New York Stock Exchange, the Chicago Board Options Exchange, the National Futures Association and various commodities exchanges. We have appeared in investment-related arbitrations administered by the American Arbitration Association and JAMS.